August 01, 2019

Money talks: Why Derrick Morgan, other NFL players are making social investments

Russ Zalatimo
Written by: Russ Zalatimo
Syndicate and Investment Banking

Derrick Morgan

By Turron Davenport – July 15th 2019

 

Retired Titans linebacker is one of several athletes using own funds to revitalize communities through education, social justice and the environment

Like a growing number of NFL players, Derrick Morgan wants to think bigger with his money. Morgan earned more than $42 million throughout his nine-year NFL career as a productive linebacker. After years of working for his money, Morgan has found ways for his money to work for him by making investments ranging from vegetarian-based products to financing affordable housing. It’s a part of his mission to have an impact beyond the playing field.

“I wanted to use my money to match my values and make more of an economic impact on the community. You start to make investments to directly impact the people you want to help.” — Derrick Morgan

Morgan and other athletes are taking that investment one step further and turning to socially responsible investors to channel their funds to investments that support causes they believe in. According to US SIF: The Forum for Sustainable and Responsible Investment, socially responsible investing experienced a growth rate of about 38 percent from 2016-18, increasing from $8.7 billion to $12 billion in professionally managed assets.

The investments range from education to social justice issues to environmental causes to community revitalization. The issues that exist within the communities that many professional athletes come from are becoming the focus of their monetary investments.

“I wanted to use my money to match my values and make more of an economic impact on the community,” said Morgan, who announced his NFL retirement Monday. “You start to make investments to directly impact the people you want to help.”

Education and infrastructure

While at Georgia Tech, Morgan studied science and technology and majored in business management. As part of his youth football camp that hosted 150 kids from the Nashville, Tennessee, area last year, Morgan managed to combine football and technology. A partnership with Microsoft and Drobots allowed the kids to take part in virtual reality exercises and use drones during the camp.

“Guys have football camps, but how can you consistently help those people that show up to your camp?” Morgan said. “A lot of the kids are from families that live paycheck to paycheck. We are trying to impress upon the kids that, hey, look, you have options for success. It is not just to be in the NFL, be in the NBA or bust. There are a lot of different avenues to success.”

Social investments
At Georgia Tech, Derrick Morgan studied science and technology and majored in business management. He was selected 16th overall in the first round of the 2010 NFL draft by the Tennessee Titans.

Sasha Shemirani, HDK media

Philadelphia Eagles safety Malcolm Jenkins also invests in ways to expose kids to science and technology. Jenkins’ foundation teamed up with Drexel University to create a six-week summer camp called Young Dragons, offered at no cost to middle school students in West Philadelphia. The program provides an innovative experience that exposes young students to STEAM (science, technology, engineering, arts/athletics and mathematics).

“Most of these kids live close to Drexel’s campus but have never been in an environment that gets them access to this type of stuff,” Jenkins said of the program. “It’s an opportunity to bring them on campus and show them what’s available out there, get them interested in science and engineering so they can see how it plays a part in the music they listen to, the video games they play, even the football games they watch. It’s just a fun way to get kids involved.”

Recently retired defensive lineman Chris Long, Jenkins’ former teammate, donated his entire 2017 salary ($1 million) to promoting educational equality through the “Pledge 10 for Tomorrow” campaign, which funded the tuition for two members of the Boys & Girls Clubs of Central Virginia to attend Long’s former high school, St. Anne’s-Belfield in Charlottesville, Virginia.

“Educational opportunity and equity are the best gateway to a better tomorrow for everyone in America,” Long said in a press release announcing the donation.

Long was named the 2018 Walter Payton NFL Man of the Year, thanks mainly to perhaps his most significant project: The Waterboys. The group, which includes many current and former NFL players, including Kyle Long, Connor Barwin, Johnny Hekker, Calais Campbell and Taylor Lewan, has helped provide clean, sustainable water for roughly 214,700 people across the world. The Waterboys have raised enough money to build 59 wells, which each cost an estimated $45,000.

‘If not us, who?’

Morgan found another social cause through an organization determined to defund private prisons. Although some people don’t realize it, private prisons are funded by ordinary investors through their banks or stock portfolios.

Morgan and Los Angeles Chargers offensive tackle Russell Okung are part of an organization that seeks to defund private prisons and reinvest the money back in communities. They believed it was important to make sure their investments are going toward a positive cause.

“I had a personal conviction on how I wanted to start using my money to match my values. I read a book called Real Impact; Morgan Simon was the author,” Morgan said. “I reached out to her and we spent time together talking about the industry. Out of that birthed a campaign that Morgan ran point on, basically revolving around the private prison industry. As I talked to more guys in the NFL about it, I saw that they were very supportive in divesting their money out of private prison industries and putting their money to work in other ways.”

Derrick Morgan

Derrick Morgan (center) during a board meeting in New York at the Athlete Transition U (ATU) Business Combine.

Sasha Shemirani, HDK media

Added Okung: “If not us, who? Many players I know are products in the fledgling urban condition. In the wake of our sociopolitical environment, many players see their voice matters and the masses pay attention. There is a growing consciousness among athletes to use our platform, notoriety and capital to drive meaningful change.”

The campaign the players are involved in is called Real Money Moves, which was founded by Simon. Their goal is to make people, including athletes, more aware of what their investments are supporting. Real Money Moves has more than $10 million in commitments from celebrities and activists looking to start a meaningful conversation about the power of money and being socially responsible with their investments.

Simon saw how athletes are becoming focused on responsible money management to retain their wealth. At the same time, more athletes are focused on impacting the community. Her suggestion to athletes is to get a social investment manager to oversee what causes their money is going toward.

“Many athletes take leadership on the charity front and donate a percentage of their money to causes they support,” Simon explained. “But what about the percentage they invest? How do they make sure that aligns with their values? That’s what social investing provides the opportunity to do … make money, but do it in a way that they can be proud of.”

If investors can channel their money into socially responsible companies and make a profit doing so, they in a sense get a double win. In some cases, investors are willing to pay a little more in management fees to make their portfolio more aligned with their beliefs.

“Everyone has a fundamental desire to have a purpose and impact,” said Terron Tidwell, a wealth adviser with Hudson Point Capital. “As more social objectives come into play, this presents the opportunity to invest in ideas one believes in while also growing their portfolio. It also may provide the potential to fill a void that traditional investing has overlooked or willfully avoided.”

However, there are some potential drawbacks. The reason most people invest in the first place is to obtain the highest possible return on the investment. When socially responsible investing becomes the primary objective, investment options can become more limited. Potentially strong investments may be left on the table.

Revitalizing communities

The calling to spark change within the community is so strong that Morgan, at 30 years old, retired from football. He will now be focused on improving conditions within communities of need.

“There is a growing consciousness among athletes to use our platform, notoriety and capital to drive meaningful change.” — Russell Okung

One way Morgan is doing that is by taking advantage of the Opportunity Zone program, which uses private investments instead of taxpayer dollars to revitalize economically distressed communities. Morgan’s hometown of Coatesville, Pennsylvania, is one such community. Morgan is a part of a group of private investors that are investing in Coatesville by way of the opportunity zone program. He is spearheading a multi-million dollar project that will revitalize downtown Coatesville, a once thriving city. Opportunity Zones allow investors like Morgan to reap a double bonus. He’ll see a return on his investment, but it also goes toward a cause that he strongly believes in.

“I’ve always been interested in giving back through philanthropy and charity, but I felt like there was more we could be doing,” Morgan said. “Instead of giving people a handout, I felt we could empower people. I started reallocating my assets out of the market and into impact investments.

“It’s a triple or double bottom line. You get a financial return and some type of a social or environmental impact at the same time. This is a way to utilize your wealth and align it with your values.”

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